Hanoi (VNA) – Customers have scrambled to buy automobiles before the end of 2020 to enjoy the 50 percent reduction in registration fees, making the auto market more robust as compared to the situation at the outset of the year.

Early this year, when the pandemic began, the auto industry had projected a year of poor business. Sales fell by 31 percent year-on-year in the first half, according to the the Vietnam Automobile Manufacturers’ Association (VAMA).

The industry feared full-year sales will be down 15-20 percent, and sought help from the Government.

Prime Minister Nguyen Xuan Phuc signed Decree No.70/2020/ND-CP at the end of June stipulating a 50 percent reduction in registration fees for locally made cars until year-end.

Accordingly, the registration fee for passenger cars, trailers or semi-trailers pulled by cars and similar vehicles manufactured and assembled domestically is reduced by 50 percent of the rate specified by Government's Decree No. 20/2019/ NĐ-CP.

Under Decree No. 20, the buyers of cars with nine seats or less have to pay registration fee of 10 percent of the car value in cities and provinces, except for Hanoi which applies a rate of 12 percent.

Meanwhile, buyers of pick-up trucks with transport volume of less than 1,500 kilos and five seats or fewer, and vans with capacity of 1,500 kilos or less will pay an amount equal to 60 percent of the nine-seater car’s registration fee.

The cut in the fee has reduced the cost of car ownership, which the Government hopes will help revive a slumping auto market.

This, along with companies’ promotions, enabled auto firms and dealers to clear out their inventories.

The market took little time to respond, with sales soaring in both July and September. Sales for the first nine months were down only 21 percent year-on-year compared to the 31 percent drop in the first half.

Some companies now even expect sales to be on par with last year.

Auto prices increase

Huyndai, Toyota, Mazda, and many other dealers are taking advantage of the situation to cut promotions, and go back to list prices of their products.

Prices of many car models were raised by from 10-50 million VND (434 USD – 2,174 USD), including Mazda CX-5, Mazda CX-8 and All-New Mazda 3 which surged from 10-15 million VND as compared to September.

Notably, Huyndai Santafe and Huyndai Tucson were sold at 21 million VND higher, while prices of Huyndai Kona and Huyndai Elantra were up 11 million VND.

For Kia Seltos and Toyota Corolla Cross, which were sold like hot cakes, customers have to wait to receive their cars.

Auto market bounces back on registration fee cut hinh anh 1Prices of Mazda vehicles increase slightly in the end of 2020 (Photo: VietnamPlus).

Robust rebound expected for year end

After falling nearly 20 percent in August due to the COVID-19 pandemic and the 7th lunar month, considered a taboo by most Vietnamese for activities concerning large sums of money such as buying real estates and cars, sales of automobiles in September increased 32 percent to reach 27,252 units.

Sales of passenger cars expanded 34 percent to 20,630 units, and commercial vehicles, up 29 percent to 6,396 units. Meanwhile, those of special-use vehicles dropped 16 percent month-on-month to 226 units.

September sales included 17,826 locally-assembled vehicles, up 28 percent, and 9,426 imported ones, up 41 percent.

Many dealers enjoyed remarkable auto sales growth, such as Toyota (49 percent), Suzuki (45 percent), Mitsubishi (46 percent), KIA (52 percent), TC Motor (53 percent), and VinFast (146 percent).

The combined sales of VAMA members, TC Motor, and VinFast shot up 42 percent to 39,147 units in September.

Experts explained that the domestic market has recovered since the pandemic has been contained while businesses have offered an array of promotion programmes.

“With the current purchase power, the auto market by the end of this year will be more robust. Auto prices are forecast to fall due to high inventory level,” said sale manager of Mazda Tran Khat Chan Dac Vuong.

According to a report from the Ministry of Industry and Trade’s Industry agency, domestic auto production was estimated at 56,200 vehicles, a year-on-year fall of 10.4 percent. However, the inventory growth rate was recorded at 122.5 percent.

Auto market bounces back on registration fee cut hinh anh 2Prices of old-model and imported vehicles will be slashed to boost car sales (Photo: VietnamPlus).

Many businesses have offered an array of promotion programmes to gain competitive edge, helping recover the auto market and save a year of gloomy business./.